Working Paper No. 945

Supply Function Equilibria in Networks with Transport Constraints

Published: December 18, 2012, revised August 2015Pages: 72Keywords: Spatial competition; Multi-unit auction; Supply-function equilibrium; Transmission network; Wholesale electricity marketsJEL-codes: D43; D44; C72; L91

Supply Function Equilibria in Networks with Transport Constraints Pär Holmberg and Andrew Philpott


Transport constraints limit competition and arbitrageurs.possibilities of exploiting price differences between commodities in neighbouring markets. We analyze a transport-constrained network with local demand shocks, where spatially distributed oligopoly producers compete with supply functions, as in wholesale electricity markets. Uniqueness and existence results are proven, and we are able to explicitly solve for symmetric supply-function equilibria in some special cases.

Pär Holmberg

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Interdisciplinary European Studies

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This is the first book in the Interdisciplinary European Studies collection. This volume provides an interdisciplinary perspective on trust in the EU from the vantage point of political science, law and economics. Lars Oxelheim, Lund University and affiliated to IFN, is one of the authors.

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